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Chaos Trading System

Just some braindroppings regarding Chaos trading. Enjoy.
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File Type: pdf trading chaos.pdf   93 KB | 3,997 downloads
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Quoting Bull
Hi everybody, I'll try to show step by step, today trades in EU.

Please look at the chart below, here is the explanation of all trades:

1. Here we've the last Valid Down Franctal, why?? because is the last fractal below the Alligator. Value: 1.2735....
Bull,

I only have one small comment about the chart you posted. Williams, in his books, states that it doesn't matter where a fractal is formed, only where it is triggered. With that in mind, I have circled the last valid down fractal according to Williams. True, it did form within the Alligator, but it was triggered well below it.

I only point this out so that anyone using fractals as entry points will be able to get into the trade as soon as possible.
Attached Image (click to enlarge)
Click to Enlarge Name: last fractal.gif Size: 65 KB
Quoting fxhermit
Just some braindroppings regarding Chaos trading. Enjoy.
Nice one...but it a pity that doesn't include any pic example

Sonic
Thank you Fx hermit, very interesting.
You have here the premise of a nice ebook
S.
  • Post #65
  • Quote
  • Edited 9:34pm Oct 26, 2008 8:29pm | Edited 9:34pm
At market open Red Zone trading criteria are still in effect on the Dailys and have been for a number of previous bars. Need to watch for an over extended market though. The do not add on after 5 consecutive bars criteria is in effect - manage any open positions accordingly. Stop loss should be at top of 5th bar.
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Click to Enlarge Name: zone.gif Size: 34 KB
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Quoting sonicdeejay
Nice one...but it a pity that doesn't include any pic example

Sonic
Hi Sonic,
Yup, you are right. When I first wrote this it was meant only for myself so I didn't bother with charts. Don't think that I will bother to add them now though. What will probably happen as this thread develops is that there will eventually be discussions and charts posted around most of the concepts expressed. At least I hope so. There already have been really good posts by a number of people and I am sure we will see many more. I think that anyone who reads this thread will gain some good practical knowledge that they can apply directly to their trading.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Quoting starskovsky
Thank you Fx hermit, very interesting.
You have here the premise of a nice ebook
S.
Thanks S.,
Good thought but I don't feel quite that ambitious. I think most of it will come out in the wash, so to speak, as this thread develops.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Just wanted to point out the difference between price feeds from one broker to another. The last chart that I posted was from GCI Finance which prints a Sunday bar and this one is from Strategybuilder fx which has a different end of day closing time from the other. Here the same Red Zone criteria are also in effect, however, we are only on bar 4 so technically this is still a valid setup bar for a Zone entry. This could bring a bit of confusion into the trade if you are silly enough, like I am ,to look at two (or more) data feeds. I would certainly like to hear other opinions on this situation. Thanks.
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Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • Post #69
  • Quote
  • Edited 6:22am Oct 27, 2008 5:34am | Edited 6:22am
....

Edit:...+50 now and counting, stops now at b/e on this counter trend move.
Attached Image (click to enlarge)
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Quoting Tommy_C
Bull,

I only have one small comment about the chart you posted. Williams, in his books, states that it doesn't matter where a fractal is formed, only where it is triggered. With that in mind, I have circled the last valid down fractal according to Williams. True, it did form within the Alligator, but it was triggered well below it.

I only point this out so that anyone using fractals as entry points will be able to get into the trade as soon as possible.
Hi Tommy,

First of all I want to apologize for delay to answer your question, I was away during the weekend, now I'm back.

As my point of view, and following the BW ideas, you have 2 types of Fractal Signals:

  1. WISEMAN FRACTAL: This break it's only an add signal, like W2, on this signal no matter where it form and execute but ONLY we take it after w1, w2, never can be our first signal.
  2. BREAKOUT FRACTAL: This other is a main breakout, and can be our first signal but the Fractal must be form and execute outside alligator.


With all of this in mind, we have the following options for entry points:
ENTRY POINTS:

  1. BREAKOUT FRACTAL: Fractal formed outside the alligator. This is Trend Entry.
  2. WISEMAN 1: Signal generated by a Divergence Bar. This is a against Trend Entry, trying to catch a new trend since the beginning.


After we're IN the market, we've ADDING signals:

 

  1. WISEMAN 2: Add a position on the third AO in our favor (green for bull, red for short).
  2. WISEMAN 3: A fractal breakout, no matter where the fractal formed.


I hope that this can help you.

Sorry for any mistake in my redaction, English isn't my first language.

Bull

Quoting ChowClown
....

Edit:...+50 now and counting, stops now at b/e on this counter trend move.
Hi ChowClown,

Great Trade!!!

If the third AO green will formed (in the next candle) we can add a new position. (Wiseman 2). I'm personally when add a position, I set for the 50% of the 1st position, that mind, if my 1st was 1 lot, all adding positions will be for 0.5 lots.

I'm on the some boat to you!
Quoting Bull
Hi ChowClown,

Great Trade!!!

If the third AO green will formed (in the next candle) we can add a new position. (Wiseman 2). I'm personally when add a position, I set for the 50% of the 1st position, that mind, if my 1st was 1 lot, all adding positions will be for 0.5 lots.

I'm on the some boat to you!
Good summary in your previous post, Bull. Thanks. I'm new to Alligator trading and I like the way each stage builds. A nice and clear, KISS approach
Another good example on EU.

On the below chart you can see the last 2 trades on EU.

The first one was a Trend Trade:

Entry Reason: Breakaout Fractal at @ 1.2512
Exit Reason: A W1, counter trend trigger. Closed at @ 1.2392
Summary: +120

Second Trade:

Entry reason: W1, Counter Trend. Opened at @ 1.2392
Exit: Till open
Summary: +60 and going


I love this system
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 18 KB
...in your experience, where are you most comfortable with a W2 initial stoploss?
Quoting ChowClown
...in your experience, where are you most comfortable with a W2 initial stoploss?
If the current candle close now (I've High 1.2465 and Low 1.2441), and confirm the third AO green, I'll set a buy Stop at 1.2466 and a SL at 1.2440 (by the book, 1 pip above high for in, 1 pip below low for exit). Remember that at this time we've our first opened trade with a SL at break even.
  • Post #76
  • Quote
  • Edited 7:47am Oct 27, 2008 7:32am | Edited 7:47am
Quoting Bull
If the current candle close now (I've High 1.2465 and Low 1.2441), and confirm the third AO green, I'll set a buy Stop at 1.2466 and a SL at 1.2440 (by the book, 1 pip above high for in, 1 pip below low for exit). Remember that at this time we've our first opened trade with a SL at break even.

Thanks Bull. Get the feeling price is at make or break level at the moment. We'll soon see

Edit:...glanced over at EJ and the 30min W1 is currently up +200...marvellous. Typically, wasn't in on that one!

Edit:...hmm the EU 30min W2 trade would have been stopped out using my MT4 feed (WHC). Decided to take the next fractal break rather than the W2, as high probability of reversal for a while from here i think, triple top printing perhaps.

Edit:....30min short W1's setting up across the board now. (EU, GU, UJ, EJ).
Ok, bar closed, W2 confirmed, then BS at 1.2469 - SL at 1.2440. A few second later the new order was triggered and now we're in with 2 positions.

I moved the Sl of the first position to the low of next bar where the position was opened, new sl 1.2413

What we can hope that happens:

Scenario I: The counter trend becomes the trend, and we would be inside from the beginning. We'll see the price above the Alligator, and adding positions by W2 and W3.-

Scenario II: The counter trend finishes and returns the original trend. We'll close all counter trend positions, and we'll open a new trend positions following the Breakout Fractal Signals.

Will see what's going on....
Quoting ChowClown
Thanks Bull. Get the feeling price is at make or break level at the moment. We'll soon see

Edit:...glanced over at EJ and the 30min W1 is currently up +200...marvellous. Typically, wasn't in on that one!

Edit:...hmm the EU 30min W2 trade would have been stopped out using my MT4 feed (WHC). Decided to take the next fractal break rather than the W2, as high probability of reversal for a while from here i think, triple top printing perhaps.

Edit:....30min short W1's setting up across the board now. (EU, GU, UJ, EJ).
Yes Chow, when I was writting my last post, the sl of the w2 was reached.

And now, the last upper fractal (2 bar left) it's now an invalid fractal for W3, because we need to be in with w1 & w2, and we was stopped out with W2. The only option that we've to open a new long position is a new W2, but for that we need that the AO change to red, and then to green, and on the third green bar set the new Buy Stop.

For the other side, if will be stopped out with our current position, and the counter trend finish, we've a a valid down fractal at 1.2334 (5 bar left)
Sorry guys, I'm sick today, cannot post anything...
See you tomorrow and thank you very much for your charts and comments !
S.
  • Post #80
  • Quote
  • Edited 6:02am Oct 28, 2008 4:58am | Edited 6:02am
Hope you're on the mend Stars!

I missed the W1 short at the hourly trendline, still asleep. W2 now setting up....

Edit:...W2 triggered but daily pivot holding price atm, plus price action since yesterday's low has been higher highs / higher lows. I'm reducing risk now to just above the high of the last 30min candle (sl 5608).

Edit:...W2 trade now stopped out.
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